TRANSPORT INS. CO. v. TIG INS. CO.
202 Cal.App.4th 984 (2012)
Court of Appeals of California, First District, Division Two.
January 13, 2012.
Transport had also filed its objections to TIG's special instructions, which as pertinent here, included the following: "Special Instruction No. 2: Violates this Court's Orders on the statute of limitations affirmative defense. The issue is when the claims accrued: the four year time period accrued either when TIG definitively denied the claim; or when a reasonable period passed after submission of the final proofs of loss." (Italics added.)
Prior to trial Judge Woolard dealt with in limine motions, one of which was TIG's motion to bifurcate, to try first the statute of limitations defense. Judge Woolard indicated her inclination to deny the motion, following which counsel for TIG attempted to convince her to change her mind. Replying, counsel for Transport argued as follows: "Your Honor, that completely misstates the issue in a reinsurance context. It's a rehash of their failed summary judgment motion. That was one of the arguments that they made in their motion, and it was rejected by this Court in favor of applying the holding of Stronghold which the Court found the persuasive authority as the only authority relevant to the issue of accrual. [¶] ... [¶] Our claim is a breach of contract claim which under the holding of Stronghold and this Court's adoption of that holding in this case as the law in the case, it accrues when TIG or Seaton denied the claim. And that's when the four years start, or a reasonable time after submission of the final proofs of loss, which goes into, of course, custom and practice on all fronts including supplementing proofs of loss."
The jury instruction ultimately given on the statute of limitations was as follows: "Affirmative defense statute of limitations. [¶] In this case, Transport's claims against the defendant accrued after Transport submitted its claims to defendants and when, one, defendants denied the claims, or, two, a reasonable period of time elapsed after the submission of the claims without a decision by the defendants. [¶] If Seaton either denied the claims or a reasonable period of time elapsed following submission of the claims by January 30, 2002, Transport's claims against Seaton were filed too late and are time barred. [¶] If TIG either denied the claims or a reasonable period of
time elapsed following submission of the claims by January 26, 2002, Transport's claims against TIG were filed too late and are time barred." The genesis of this instruction is central to the issue here and will be discussed in detail below. Suffice it to say here that at the least Transport agreed to this instruction—if it did not propose it.
The parties agreed to submit the matter with special verdict forms as to each reinsurer, asking the jury to answer specific questions, the first of which was, "Do you find that Transport timely filed its lawsuit against [the particular reinsurer]?"
Transport's closing argument was late in the afternoon of June 5, following which Judge Woolard gave her concluding instructions, instructed the clerk to swear the bailiff, and the matter was then in the hands of the jury. It was "close to 4:30." At 11:16 a.m. the next morning, the jury returned with the verdicts, answering "No" to the two questions numbered 1.
Judgment was entered on June 9.
1. Ario v. Underwriting Members of Lloyd's of London (Pa.Commw.Ct. 2010) 996 A.2d 588, 597, the case cited to us by Transport after the briefing was closed, describes Stronghold similarly: "In Continental Casualty, where the policy established that loss covered under the policy must be reported to the reinsurer `as soon as practicable,' the court concluded that the insurer's cause of action for payment did not arise until notice of loss was provided to the reinsurer and the reinsurer was afforded a reasonable time in which to decide whether and how much it would pay."
2. In fact, the claimed reasons for Transport's overlength reply brief are that the reinsurers' respondent's briefs do not accurately recite the evidence and cite "irrelevances," and that because the primary issue is "whether the trial court committed instructional error, Transport is entitled to view and present the trial evidence in the light most favorable to the claim of instructional error."
3. At trial, Nalepa testified as follows: "I, quite frankly, to this day don't know what Transport was doing with [its collection efforts] and who had the responsibility at their end."
4. Seaton requests judicial notice of material it asserts might be germane, and TIG's brief also mentions this. We deny the request for judicial notice.
5. According to Transport, this and the earlier draft complaint are of no significance because they were for declaratory relief only and did not contain a cause of action for breach of contract.
6. Focusing on Judge Woolard's comments in her tentative ruling, and that her subsequent order did not contain what she said, Transport's brief says things such as this: "[T]he trial court did not expressly address the equitable tolling issue in its written rulings, but clearly ruled against Transport on this issue because it did not include equitable tolling in the rule it ultimately adopted, despite Transport's detailed argument on this point in its moving papers. [Citations.] ... Given that, in its tentative ruling, the trial court indicated it would apply equitable tolling [citation] but, after hearing TIG's arguments on this issue [citations], it excluded equitable tolling from its written ruling, we would ... argue that the trial court unquestionably `determined that equitable tolling should not apply.'" As will be shown, this is an overstatement.
7. TIG's proposed instruction would have told the jury: "TIG contends that Transport filed this lawsuit too late. To establish this defense, TIG must prove that this action was not commenced within four years of the date on which the claim sued on arose. You must decide when the claim arose, that is when TIG failed to pay the amounts allegedly due under the terms and conditions of [policies] FR 297 and FR 298. If TIG's failure to pay the alleged amounts due took place before January 26, 2002, Transport's lawsuit was filed too late and is barred by the statute of limitations."
8. As indicated, Transport's opening brief referred to its reply in support of its new trial motion, which contained an argument that Judge Woolard's ruling was "law of the case." TIG took issue with this, and Transport's reply brief concedes that law of the case could not pertain, as the doctrine "has no application in trial court proceedings without an appellate decision. (People v. Barragan (2004) 32 Cal.4th 236, 246 [9 Cal.Rptr.3d 76, 83 P.3d 480].)"
9. The treatise goes on to note that "review on appeal from the final judgment has been allowed in exceptional cases," citing Gackstetter v. Frawley (2006) 135 Cal.App.4th 1257, 1269 [38 Cal.Rptr.3d 333]. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 10:385, pp. 10-149 to 10-150 (rev. # 1, 2011).) Gackstetter is one of the cases Transport relies on here.
10. This may be problematic, in light of the lengthy statute of limitations involved. (See Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 380 [2 Cal.Rptr.3d 655, 73 P.3d 517] ["Because plaintiffs had three or four years after discovery, and up to ten years after the project's completion, to bring their suits for latent construction defects, many of the concerns that might warrant equitable tolling are ameliorated."]. Cf. Flintkote v. General Accident Assurance Co. of Canada (N.D.Cal. 2007) 480 F.Supp.2d 1167, 1179-1180 [holding equitable tolling could apply to four-year statute of limitations in asbestos case].)